I don't really know if most of the shorts are originally for boys or girls, they seem to fit both and so far nothing bad has happened to either of the kids.
And what bad could happen? Your daughter is not going to spontaneously grow a penis from wearing boy shorts. And if your son noticed that his penis doesn't fit into the girl shorts, he'd say something about it.
Well it would've helped my DS when he was at nursery. His best friend was a little boy called Libet so he said. Libet loved to wear an army type jumper as did DS. Months later I found out Libet was a short haired girl called Elizabeth.
So he would never have talked to his best friend because she'd have been brandmarked as girl with a pink shirt. You think that would have been good for him? Missing out on having a best friend? 
And if you say they would have been best friends anyway, then his ignorance of her sex didn't do any harm, now, did it?
Can someone please explain what trauma it has caused anyone ?
Two words: Puberty blockers.
THAT is the harm it does. And it is quite severe harm indeed.
Children who do not conform to gender stereotypes - of which pink and blue are symbols - are being transed, their healthy bodies poisoned with puberty blockers, then surgically altered, and sterilized, all so that gender stereotopes are conformed to.
Again, what is the PURPOSE of forcing gender on children? What GOOD does it do?
Certainly no good to the children.